The Central Bank has issued criteria to guide banks wanting to allocate loans from international funding institutions to strengthen their tier-2 capital base. In a circular issued yesterday, Monday, the CBE said the loans must be unconditional and not lent against any specific asset if they’re to factor into the institution’s capital adequacy ratio. Banks should also process the loan in the same way they would handle facilities from the CBE. A number of local banks have entered into loan agreements with international institutions recently, according to Al Mal, including Banque Misr (which it says has signed agreements for USD 500 mn from the Industrial and Commercial Bank of China and USD 350 mn from Credit Suisse) and the NBE (a total of USD 1 bn in facilities from China).

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